Surviving Twitter's Growing Pains: Ex-CEO Dick Costolo

Summary

Podcast Summary: Long Strange Trip: CEO to CEO with Brian Halligan

Episode: Surviving Twitter's Growing Pains: Ex-CEO Dick Costolo
Host: Sequoia Capital | Brian Halligan
Guest: Dick Costolo (Ex-CEO, Twitter)
Date: May 7, 2026

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Overview

In this episode, Brian Halligan interviews Dick Costolo, former CEO of Twitter, to uncover lessons from steering one of Silicon Valley’s most notorious hypergrowth companies through chaos, culture shifts, and public scrutiny. Dick shares candid strategies around decision-making, communication, feedback, leadership, and scaling challenges that resonate with founders and CEOs facing rapid growth and organizational complexity.

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Table of Contents

• Twitter’s Culture and Challenges upon Dick’s Arrival
• Leadership Transition and Dysfunction
• Speed, Velocity, and Pushing Decisions Down
• Building an Organization: Processes, Bias to Action & DRIs
• Scaling Communication and Context
• Maintaining Focus in an Era of Hypergrowth
• Management by Walking Around: Culture and Motivation
• Tactical vs. Strategic Leadership: The Forest & Fires Analogy
• Feedback, Tough Conversations, and Non-Passive-Aggressiveness
• Hiring, Firing, and the Talent Bar
• Navigating Hypergrowth Pitfalls
• Competing with Giants and the Importance of Context
• Reflections: Regrets, Press, and Content Moderation
• CEO Archetypes, Board Management, and IPO Reflections
• Notable Quotes & Moments

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Twitter's Culture and Challenges

[00:00–05:43]

• Dick describes early Twitter as “the drama queen of hyper growth companies.”
• The culture was messy, communal-decision-based, and lacked business fundamentals:

  “When I took over as CEO that year, the Twitter bird had hanged itself and exploded on two different magazine covers … Next year's goal: no dead birds on magazine covers. Low bar.” (Dick, 00:00)

• Twitter had no revenue machine, was “famously dysfunctional and chaotic”, and group decision-making slowed execution dramatically.

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Leadership Transition and Dysfunction

[05:43–07:24]

• Leadership changes (“pushing Ev out”) were emotionally and organizationally painful.
• Founders (Jack Dorsey, Ev Williams) remained on the board, creating a “founders breathing down your neck” dynamic.
• Dick nearly quit amid board confusion, only to be “pulled back in”:

  “Bijan Sabet from Spark texted me, ‘Don’t quit.’ … Ok, you guys told me you wanted me to leave … Super crazy.” (Dick, 06:45)

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Speed, Velocity, and Pushing Decisions Down

[07:24–16:57]

• Dick’s immediate focus: relentless pursuit of velocity.
• Moved away from groupthink; pushed decisions down the stack:

  “We're not gonna make decisions as a group. … There’s gonna start being a lot more of that.” (Dick, 08:12)

• Introduced “bias to yes”—only direct managers can say no; stopped requiring cross-org approval unless legal/privacy involved.
• Example: unwinding slow, multi-approver processes that stifled launches.

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Building an Organization: Processes, Bias to Action & DRIs

[16:57–19:13]

• Advocated for minimizing process creep:

  “Don’t solve problems with processes … pretty soon you’re not managing outcomes, you’re managing to the processes.” (Dick, 17:06)

• Instead, rely on Directly Responsible Individuals (DRIs) and clear operating controls.

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Scaling Communication and Context

[19:13–22:48]

• Communication architecture is central; managers must ensure “everybody understands what you understand.”
• Regular all-hands focused on reiterating priorities, context and implications—motivating the “cathedral builders,” not just “bricklayers” (21:03).

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Maintaining Focus in an Era of Hypergrowth

[24:34–27:47]

• Focus remains essential even when fast iteration enables more frequent, parallel experiments.
• Dick retells the “Bezos vs. Jobs” strategy debate:

  “Steve says … you should say no to almost everything ... Bezos goes, ‘Oh yeah, well I like to do everything... My team has to talk me out of stuff.’ ... there’s lots of ways to be successful.” (Dick, 26:18)

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Management by Walking Around: Culture and Motivation

[27:47–30:01]

• Dick adopted late-night, walk-the-floor sessions to understand teams and signal priorities; modeled after Bill Campbell’s advice:

  “I just … would go out, get dinner, come back at 9pm … whoever’s here, I’m going to talk about what they’re doing at the next All-Hands.” (Dick, 28:53)

• Resulted in cultural and motivational shifts as night-owls’ projects became highly visible.

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Tactical vs. Strategic Leadership: The Forest & Fires Analogy

[30:00–31:15]

• Urged leaders to move beyond “firefighting” to “forestry management”—thinking in multi-year, holistic terms rather than only solving today’s crises.

  “Your job is to … map the territory and do forestry management ... What has to be true 24 months from now … stamping out fires isn’t going to work as we scale.” (Dick, 30:02)

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Feedback, Tough Conversations, and Non-Passive-Aggressiveness

[31:24–35:41]

• Dick’s style: blunt, direct, impatient—valued honesty over passive aggression:

  “I am super impatient... It seems like you don’t like working here? You should quit.” (Dick, 31:50)

• Advice for giving tough feedback: write it down the night before, say only what’s written, avoid fluff, and “sit with the silence.”
• Role-playing with managers to practice these uncomfortable conversations.

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Hiring, Firing, and the Talent Bar

[35:41–40:58]

• Promoted internally when possible (Kevin Weil, e.g.).
• For critical roles, sometimes non-consensus external hires essential (Adam Bain, Anthony Noto).
• Admits firing is always emotionally taxing and often happens too late:

  "There's nothing worse than having to do something like that. … 6 a.m. wake up in a cold sweat… it's just horrible." (Dick, 38:59)

• Stresses the importance of not letting “transfiring” become a way to avoid making tough calls.

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Navigating Hypergrowth Pitfalls

[41:02–44:54]

• Biggest pitfall: ignoring efficiency when flush with capital.

  “It's very easy to take your eye off the ball when you raise too much money ... next thing you know, the burn is … what are you worried about?” (Dick, 41:21)

• Hiring quality inevitably dips in hypergrowth; must be ruthless about managing out underperformers and not inflating performance reviews.

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Competing with Giants and the Importance of Context

[44:54–47:10]

• Twitter faced “juggernaut” Facebook; acknowledged their tenacity and speed.
• Competitive approach: deep customer listening and understanding, not just feature parity.

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Reflections: Regrets, Press, and Content Moderation

[47:10–52:38]

• Major regret: not acquiring Instagram before Facebook did.

  “We tried to buy Instagram … would have given them over 10% of Twitter … would've gone back and borrowed $300M to make it happen.” (Dick, 47:31)

• Content moderation is “infinitely hard”; no universal rules, always judgment calls:

  “You just can't have these hard and fast rules ... you're going to get a bunch of them wrong.” (Dick, 51:23)

• Bad press takes a toll, but improv/comedy background built resilience. Recounts being booed at Adelaide Comedy Festival.

  “We got good press, we got bad press... you just become resilient.” (Dick, 53:51)

• Would have preferred to keep Twitter private longer—public markets added significant stress and short-term noise. (65:11)

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CEO Archetypes, Board Management, and IPO Reflections

[56:11–65:59]

• No single archetype; “lots of ways to be successful” (Bezos).
• Copying someone else never works; authenticity is essential.

  “If you try to be someone you’re not, nobody is fooled.” (Dick, 62:18)

• Brought independent operators onto the board far earlier than many startups—immensely helpful for CEO support and hiring.
• On CEO ambitions: get your name out; pursue lateral leaps; risk-taking pays unexpected future dividends (“comedy class” made public speaking easy).

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Notable Quotes & Memorable Moments

• [00:00] “Next year’s goal: no dead birds on magazine covers. Low bar.” — Dick Costolo
• [08:12] “We're not gonna make decisions as a group… there’s gonna start being a lot more of that.” — Dick Costolo
• [17:06] “Don't solve problems with processes … pretty soon you're not managing outcomes, you're managing to the processes.” — Dick Costolo
• [21:03] Analogy: “The bricklayer says, 'I'm building a beautiful cathedral.'” — David Cancel, paraphrasing Dick
• [26:18] “Steve says … focus … Bezos: ‘I like to do everything, my team talks me out of stuff.’” — Dick Costolo
• [30:02] “Your job… is forestry management … stamping out fires isn’t going to work as we scale.” — Dick Costolo
• [31:50] “I'm super impatient … seems like you don’t like working here? You should quit.” — Dick Costolo
• [33:49] “Write down what you want to say and then say that and don’t say anything else.” — Advice from Bill Campbell, told by Dick
• [38:59] “6am Wake up in a cold sweat … it's just horrible.” — Dick Costolo on firing
• [41:21] “Once the money's there, you start getting [lax].” — Dick Costolo
• [47:31] “We tried to buy Instagram … would've gone back and borrowed $300m to make it happen.” — Dick Costolo
• [51:23] “You just can't have these hard and fast rules.” — Dick Costolo on content moderation
• [62:18] “If you try to be someone you’re not, nobody is fooled.” — Dick Costolo

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Timestamps for Key Segments

• 00:00 – Twitter’s dramatic culture and first impressions
• 05:43 – The painful CEO transition and board drama
• 07:24 – Instilling velocity and changing decision-making
• 15:15 – “Bias to yes” and accelerating experiments
• 17:06 – Avoiding process creep; focusing on outcomes
• 19:43 – Communication scaling and context
• 24:34 – Priorities, iteration, and the focus debate
• 27:47 – Management by walking around; culture change
• 30:00 – Tactics vs. strategy (“forest fires and forestry”)
• 31:24 – On non-passive-aggressive management and feedback style
• 33:49 – Bill Campbell’s approach to giving hard feedback
• 35:41 – Hiring internally, non-consensus external hires
• 38:59 – Firing: emotional challenges and best practices
• 41:21 – Pitfalls of hypergrowth; capital efficiency
• 44:54 – Competing against Facebook; customer-centric tactics
• 47:10 – Regret: Not acquiring Instagram
• 51:23 – The complexity of content moderation
• 53:51 – Coping with press, public scrutiny
• 56:11 – CEO archetypes, being authentically yourself
• 63:24 – Building a board and the value of independence
• 65:11 – Going public vs. staying private

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Final Takeaways for Scale-Up CEOs

• Move fast by empowering teams and limiting process.
• Communicate priorities relentlessly—with context and clarity.
• Be authentic and direct—even if it’s uncomfortable.
• Learn to give tough feedback; don’t avoid hard conversations.
• Focus matters—even in hypergrowth—but know which doors are truly “one way.”
• Boards matter: get real operators involved before the IPO.
• Don’t let growth outpace operating discipline—particularly around hiring and capital use.
• Being CEO isn’t about copying icons; it’s about self-awareness, adaptation, and walking your own long, strange trip.

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For leaders in hypergrowth: This episode delivers actionable wisdom, battle scars, and a reminder that—despite the chaos—success is forged not in formulas, but in the courage to move fast, stay honest, and lead with relentless clarity.

Transcript

[Dick Costolo]

I just felt like Twitter was such a drama. Twitter is the drama queen of hyper growth companies. It was like when I took over as CEO that year, the Twitter bird had hanged itself and exploded on two different magazine covers. So I went up to our head of communications, Gabriel Stricker, and I was like, gabriel, great news. Next year's goal, no dead birds on magazine covers. Low bar.

[David Cancel]

Hey, everybody. We have Dick Costello on the show. He's a rare bird in Silicon Valley these days. He was CEO of Twitter, but he was the third CEO. The first one was Jack Dorsey, who you probably met on the pod a couple weeks ago. The second was Ev Williams, the other founder. And Dick took over as COO and then ultimately as CEO of Twitter. And he ran it for five years. It was a really extremely fast growing organization. They created a category, didn't have a revenue machine, and was famously dysfunctional. I think Dick did a really nice job and he was sort of the adult in the room and he kind of ran the Scale Up CEO masterclass. He talks all about in this podcast. He talks about increasing velocity of decisions and execution, which is tricky as you scale. He talked about how he managed by walking around. This is something I did. I think it's a really good idea. He talked about how do you give very tough feedback to very tough people. There's some gems in there dealing with the press, particularly press that doesn't like you. He talks about focus and how much focus you really need in the era of AI when you build stuff so quickly. He talks about how do you manage the forest instead of fighting all the fires. He's got a lot of wisdom in here. He also talks about his regrets, including a whopper. His regret not acquiring Instagram. Got one hurt. If you're scaling your 100 employees, you're ripping growing fast. You get a lot of growing pains. Maybe you feel a little out of control. This episode's for you. Welcome to the show.

[Dick Costolo]

Thanks for having me.

[David Cancel]

Appreciate it. I want to wind the clock back to Twitter. Of course.

[Dick Costolo]

Of course.

[David Cancel]

I watched a documentary recently and was

[Dick Costolo]

it the one I was in?

[David Cancel]

Yes. I thought you were really good at it.

[Dick Costolo]

Thank you. Great. You're great. You're great. In the documentary, you were really yourself.

[David Cancel]

You came off as rational and knowing what the hell you were doing. But you're in a long line of interesting CEOs of Jack Dorsey and then Ev Williams and yourself and Jack Dorsey and Parag and Elon Musk.

[Dick Costolo]

Elon. And don't forget, you know, the Elon hired. Hired hand Linda Yakarino.

[David Cancel]

Okay. Of course, of course. You joined as coo. What was the pitch?

[Dick Costolo]

What was the pitch to me?

[David Cancel]

Yeah, EV pitched to you.

[Dick Costolo]

I mean, yeah, EV pitched me. The pitch was. The initial pitch was, I'm taking paternity leave for a couple weeks. I, Ev Williams and taking paternity leave. I need someone to come in and like, just hold down the fort for a couple weeks while I'm, you know, out. Interim. Yeah, interim. Would you. Would you do that? But then while we were having that discussion, he's like, well, what if it was permanent? You know, what if you were a CEO and I was going to go start another company? So, rewinding the clock a little bit further, I'd sold my previous company, feedburner, to Google. It's where I re bumped into the Twitter guys because they were all there from Blogger and getting ready to leave and start Odio, which became Twitter. Anyway, I'm leaving now. I'm leaving Google. A couple years later, Ev texts me that I was like, I'm gonna go start. I'm gonna go start another company again with one of my feedburner, One or more of my feedburner co founders. And then I've said, what if it was. What if it was permanent? What if you were COO and Twitter was already. So it's, it's. It's summer 2009. It was already, like, had hit the, you know, Ashton Kutcher and Oprah Winfrey or, you know, it was ripping, fighting for the. It's going to get a million followers.

[David Cancel]

I can see why you wanted to

[Dick Costolo]

do it, but zero, zero revenue model, zero business model. All the articles were, sure, Twitter is interesting, but it'll never. They don't have a business model. They'll never make money.

[David Cancel]

Yeah.

[Dick Costolo]

And I just kind of had the man. You don't get an opportunity to go to these, to get on these rocket ships. And when you get the opportunity, you should do it. So I did it.

[David Cancel]

So it was famously dysfunctional and chaotic. I assume you knew that going in. Was it much more so than you thought, or was it about what the press was saying?

[Dick Costolo]

It's always both. You know, the things that were different were. It was very much a collective, by which I mean, like, decisions were kind of made as a group.

[David Cancel]

Yep.

[Dick Costolo]

It wasn't. Okay, well, you're responsible for engineering. I don't know, you make it figure it out and, you know, figure out what the right answer is. Or should we, you know, have. Should we make. Retweet a native thing or should it be, you know, just you. You had to write RT at the time and, like, rewrite the tweet.

[David Cancel]

I remember that.

[Dick Costolo]

And. And there was a discussion about, well, should we just have retweet be a thing you can do in Twitter? And it would be kind of sit around the table and talk about it and decide. The group would decide.

[David Cancel]

Okay.

[Dick Costolo]

You know, so. So things moved methodically is a diplomatic way of putting it. And decisions were reached over a period of time. It was chaotic. And then it was also just. It was just. We just didn't. It just didn't move very quickly. It didn't move quickly at all.

[David Cancel]

In the documentary, it went through the, you know, pushing Ev out and giving you the CEO job. It sounded awful, the whole process.

[Dick Costolo]

It was awful.

[David Cancel]

What's your side of it? What was going on?

[Dick Costolo]

I don't really have a side of it other than it was an awful. Like, it's. It's. You know, these things in hindsight are. It happened very, very quickly. It happened super slowly, painfully. And. And, you know, I was informed, like, in the Driving rain on the Road home by, you know, Evan Jason that the board decided that you should be the CEO, but I hadn't been told. And then Bill Campbell called me, and, like, you should just quit, you know, and then. And then, like, why am I quitting? You know? And, like, anyway, and then this went. And then, like, the board decided, actually, no, Ev is going to remain CEO, but you've been great, and we're going to vest a bunch of your options in so long.

[David Cancel]

Okay.

[Dick Costolo]

And that. I mean, no kidding.

[David Cancel]

Yeah.

[Dick Costolo]

Over many, many days and weeks. And finally I was like, listen, just write up the separation agreement. And, you know, I'm good. I'm good. Like, whatever. I'll go find some. I'll go do something else. And then, you know, to make a long story short, the board got back together, was like, oh, no, no, no, no. Remember Bijan Sabay from Spark texted me, don't quit. I was like, I'm not quitting. Like, okay, you guys told me you wanted me to leave because I was going to stay anyway. It was super crazy.

[David Cancel]

Yes.

[Dick Costolo]

And there was obviously a ton of stuff going on. And anyway, long story short, they're finally like, look, you got to do it anyway. Like, a really long story short, I was like, all right, I'll. I'll stay and do it.

[David Cancel]

Okay. You take over. You're the adult. What did you do initially?

[Dick Costolo]

Yeah.

[David Cancel]

Like, it's very tricky, the situation.

[Dick Costolo]

Yeah.

[David Cancel]

And I think the current. The Existing founders are hanging around, probably looking over your shoulder, if not breathing down your neck.

[Dick Costolo]

Well, Jack was the chairman of the board still. Ev had made Jack chairman of the board when he made himself CEO. EVs still on the board. So two of the founders, Ev and Jack, are still on the board.

[David Cancel]

And Biz was in the company, and

[Dick Costolo]

Biz is in the company, and Jason Goldman's in the company running product and, you know, and a bunch of other people. Yeah, the. The first thing that I felt. And I've sort of foreshadowed this, the first thing that I just felt we had to do is, like, velocity, velocity, velocity. And that remained a concern of mine throughout my time there. Like, faster, faster, faster. Cadence, cadence, cadence. Like, how can we go faster? Why do things take so long? If this takes six weeks, what could. What would have to be true for it to be two weeks? We just. I did stuff like that constantly. Cause I was always like, man, this is like dental surgery. But it was starting from a position of, we're not gonna make. We're not gonna sit around the table and vote on things anymore. I remember vividly the status. Like, the status line changed from like, what are you. What's going on? Or what's happening? To something else. Or maybe it changed to what's happening. I don't even remember. I wasn't even involved in it. And one of the front engineers, Brit Savettaville, came into my office, was like, hey, man, what's going on? I was like, what are you talking about? He's like, the status bar changed to what's happening. I was like, okay. He's like, I didn't. No one asked me, you know, what I thought about that. And I was like, oh, man. Yeah, we're not doing that anymore. Like, it's gonna start being. There's gonna start being a lot more of that. So that was thing number one.

[David Cancel]

Okay.

[Dick Costolo]

Thing number two was there were a set of operating principles that were written on a whiteboard that Biz had been involved in with either. Either on his own or with other people. But they were like, you know, like, sometimes you'll get on a United Airlines flight or whatever, and they'll say, here at United Airlines, we believe in integrity and honesty. I'm like, okay, who cares? Like, that doesn't help me. That tells me nothing about every company. Like, whatever. And also, it doesn't help me make any decisions. And these things are meaningless, and they're usually weaponized against management by, like, you know. Well, it says right here. Anyway, so I was like, okay, we gotta get rid of these things. They're like, they're like, not useful. They're.

[David Cancel]

Did the founders push back?

[Dick Costolo]

No, they didn't really.

[David Cancel]

Okay.

[Dick Costolo]

And so got rid of those. Like, there was, There were just. I remember there were just like, everything was just kind of like messy, you know, I remember there was this kitchen and there was like, it was just kind of a mess. There were like dirty dishes in the sink and everything. And I think I sent out an email. I was like, this is why the fucking site crashes. Like, you may, you know, you may not get it. But like, this, this is why the site crashes. Because everything's just kind of fucking like, oh, well, someone else will clean it up. And I was like, this is ridiculous. And it was just try. I just tried to get this sort of like, we're not gonna do this. Like, oh, well, we'll get them next year's stuff anymore. There was a poster on one of the floors that was like, we'll make better mistakes next time or something like that, you know, And I was like, get that poster out. It's not. I don't really care about it, but it's just sort of indicative of, oh, well, you know, and then the site would crash again and people would go like, oh, well, we'll figure it out. You know, we'll. Hopefully we won't happen again next, you know, next year, whatever. So it was a lot of cleaning that up and a lot of velocity. Velocity, velocity.

[David Cancel]

All any CEO wants to talk about now is speed.

[Dick Costolo]

Yeah.

[David Cancel]

And particularly like companies seem to slow down as they earn. Hyper growth.

[Dick Costolo]

Yeah.

[David Cancel]

Because it's like you get bigger and get more or less done.

[Dick Costolo]

Yeah. You. Because barnacles build up on the. You get like organizational barnacles, you know. So a couple of things. Initially, when we were smaller, this is sub 200 people. What I did to speed things up was one, we're not going to make decisions as a group. We're going to push decisions down the stack. By the way, I don't have to be like, don't come to me and ask me what you should do about this unless you have no idea and want my opinion. Like, figure it out, you know, and. And don't tell your team what to do. Tell them to figure it out and push as many decisions down the stack as you can. And I don't want to hear, you know, I remember I would talk to Jack Dorsey at these dinners we would have from week to week when he was chairman and was CEO of Block down the street. From us. We would get together on Tuesday nights and have dinner. And I remember telling him, God, I hate hearing Dick said in the company as a reason for things. Because what would happen was, I'll give you an example. I remember this example really well. The Android app started taking longer and longer and longer to boot and so we would have a metrics meeting. I was like, hey man, you can see the usage numbers going down almost linearly with Android boot time going up. People are firing up Twitter and it's taking too long and they're moving on to something else. Like over here on iOS that doesn't happen. It's gotta be the same boot. It's gotta take just as long to boot Android as it does iOS. Okay? So two, three nights later, a week later, I'm walking around like one of the engineering floors after hours and this Android engineer comes up and me and goes, hey, can I ask you a question? I'm like, yeah. He goes, hey, did you say remove the JSON file from the Android boot system? I was like, I didn't. I know what a JSON file is, but I couldn't tell you what's in the Android boot JSON. And he's like, okay, because I was told Dick said removed it. And I was like, aha, I think I know what's going on here. Right? And this would happen throughout the company. Some manager, director decides here's a way to solve this problem. And the engineer pushes back against them and they just go, you know what Dick said, do it. And it became like this reason for doing things. So part of the speed was, no, we're not going to have someone. So said it's push the decisions down the stack. And by the way, if your team makes a decision and you can't defend it to your manager, like that's don't go. Well, so and so said like have the engineer talk to the director, whatever. The second thing I did is we got bigger and bigger is I started realizing, oh, the organization is slowing down because there are all these fiefdoms in the organization that wants, that want like ball control over their stuff. So very common, very common. So, so here's, here was, here's how it surfaced. We ran an experiment and I was like, oh, this is actually really super interesting. What are the hypotheticals about what this experiment would do in production? The engineer runs through it in an experimentation meeting, like, great, let's go ahead and launch this to, you know, x percent of users and see what happens. Yeah, one week, two week, three weeks, go By. I'm like, hey, where's. I'm like, looking at the app, I'm like, where's the. You know, where's this engagement experiment we're running? And I find the engineer. He's like, oh, I'm waiting for, you know, trust and safety to sign off on. I'm like, what? It's like, oh, yeah. Well, I asked so and so if we could launch this if ready, launch. And they didn't say no, but they said, you have to go get approval from years of security. And I've started realizing that, that when people would try to go do something, they wouldn't be told, no, you can't do that. It was something much, much worse and slower than that.

[David Cancel]

You need approval from security. You gotta get security.

[Dick Costolo]

You gotta go ask these 14.

[David Cancel]

Yeah, you gotta ask your mom.

[Dick Costolo]

Go ask these 14 people. And if they all say yes, okay,

[David Cancel]

everyone's got this problem. How do you fix it?

[Dick Costolo]

So what I did was it's very similar to what Bezos used to do at Amazon with biased action. It was from my improv background. I was like, we're gonna have a bias to. And biased to yes is only the person you report to is allowed to tell you you're not allowed to do that, or legal can tell you if you do that, you'll be fired because it's illegal and a violation of the privacy policy. But no other organization, period, is allowed to tell you you can't do that. Or you need to go ask these people for permission. Just your direct manager. And that means if you have an idea for an experiment and your manager signs off on it and you have time to do it because you're done with whatever else you're working on, no one can tell you you can't do that. Or, you know, the marketing team's not allowed to tell you you can't use the mailchimp software we license because that's the marketing teams, right? And so bias to yes was I don't want to hear about something being stalled because organization X said you have to go to get approval from organization Y. And that was great. Experiments started flying out, the flying out. Um, in fact, engineers started going like, wait, I don't have to necessarily get designed to build all these wireframes for something. I can just do it myself, since we're only launching it to 1% and see if it works. And so that was just great. It worked throughout the organization. And I would repeatedly get on stage at all hands meetings and, like, talk about, like, biased yes. And what it means and what it doesn't mean, doesn't mean you can go to stop doing what you're supposed to do because it's priority and do whatever you want to do. Because your manager is going to go, like, if you do that, I'm going to fire you. Because you know the. You're being measured on your.

[David Cancel]

No group decisions. DRI, DRIs and bias to action. Anything else that all these CEOs I work with are like, we're slowing down. How do we speed up?

[Dick Costolo]

Yeah. Don't solve problems with processes. So it happens all the time in organizations. Like some customer problem happens, the customer churns out or the advertiser quits and the CEO goes, that can never happen again.

[David Cancel]

Yeah.

[Dick Costolo]

You know, and so what happens? Some step gets added to some process. That's like before you do. I remember at Google famously, the launch checklist got to be like 17 pages long or something. And Larry was like, this is insane. I was like, yeah, it's because, you know, it's like the FDA never another thalidomide or the tsa, like make sure there's no water bottle on the plane. And pretty soon you're not managing the outcomes, you're managing to the processes. And you gotta go through nine steps before you, you know. Yeah. Instead. Instead of just managing to the outcome of make sure there's not a bomb on the plane. So the way we did that, whether you do that is you solve problems with DRI's operating control and not processes. You should probably only really have a couple organizational processes and everything else should be span of control and decision making. When you do that, you can't. And this was a, this was something I had to under come to understand and adapt to. When you do that. You can't punish people when things go wrong. Yeah, you want them to take risks, you want them to be bold, you want them to have this like bias to action and doing things and not going around and asking for, tiptoeing around, asking for permission. Yeah, but one of the implications is you can't punish people for making mistakes. And I would got to the point where I was, I would tell the team, it's not the job of leadership to prevent mistakes from happening. It's the job of leadership to correct mistakes quickly when they happen. So if you screw something up, like by all means tell us so we can help you fix it. But no one should get in trouble for screwing something up or making a mistake. And I didn't come to that immediately, but I came to realize that that was an important artifact, if you will, of pushing decisions down the stack and bias to. Yes. And we're not going to have lots of processes.

[David Cancel]

Love it. So many of the CEOs I work with, I just was at a. I won't say the company, but here in New York City and spoke at their company meeting. And here's how I would just describe every company. When it's. Call it under 50 employees, everybody knows what's going on all the time. When it's over 150 employees, nobody knows what's going on anytime.

[Dick Costolo]

Yeah.

[David Cancel]

How did you fit. How did you scale communication, keep people on page and tell me a little bit about the management by walking around?

[Dick Costolo]

Yeah. Well, I did two things. First of all, I taught this management class at Twitter. It was actually based on Ben Horowitz teaching a management class at Loudcloud. Fascinating. And Ben had in his outline from his management class a statement that I like highlighted and underlined and circled three times was, make sure everybody understands what you understand. So I would always tell my managers that, like, your job is to make sure everybody understands what the priorities are and what it means for them and their team, how they fit into those priorities, and more importantly for your team, what it means for them personally and professionally. If we achieve what we have to achieve. Those. Those kinds of things are great. I remember somebody telling me a story of taking a factory tour at a Tesla shop and seeing some guy who's like, screwing a widget into the car and asking the guy, like, what. What are you doing? And. And the guy didn't just say screwing the widget into the car. He said, well, if I do this and we're able to build these kinds of cars, and these kinds of cars can become more popular in America. I mean, the guy understood the story, and I thought that was great.

[David Cancel]

And so it's like the analogy. Somebody asked a bricklayer, what are you doing? And, yeah, the bricklayer says, oh, I'm laying bricks. And the other bricklayer says, I'm building a beautiful cathedral. I love that.

[Dick Costolo]

Yeah, like you want people to under. I mean, how much more motivating is it to work in a company where, you know, if I'm successful in my work, I understand what the implications are for the. For both me personally and the company. Okay.

[David Cancel]

Priorities in context.

[Dick Costolo]

Priorities in context.

[David Cancel]

Good news travels fast, bad news travels slow. And it's slow. As the OR gets bigger, it slows down and the signal gets distorted. How does CEO deal with that?

[Dick Costolo]

Yeah, I said earlier, it's not the Job of leadership to prevent mistakes from happening. It's the job of leadership to help correct them quickly when they happen. So I would always communicate. You got to tell leadership if something screwed up, if you. If your situation is screwed up or your team or some decision is a mess, you have to communicate that constantly. And then secondly, I would regularly communicate the priorities to the team over and over and over at all hands meetings. Here's what the priorities are that we're working on. This is how we're going to measure them. This is why they're important, and this is what they mean for us as a company if we're successful. You always wanted. I always wanted people to understand not just what we had to do, but why it was important to do it. And I think that scaling communication architecture is like one of the most important things in any company. And part of it is never saying because so and so said. That's not context. That doesn't help your team understand context for why some decision was made or what. Or what they should do or how they should go do it. So that combination of pushing decisions down the stack, making sure that everybody understands what you understand, and that a lot of that is context and always communicating problems or issues up the stack as a means of helping get. Helping get it resolved quickly were the ways we dealt with that. One last thing that I picked up from a Steve Jobs trick.

[David Cancel]

Okay, I love a Steve Jobs trick.

[Dick Costolo]

Yeah. So when Steve was managing both Pixar and Apple. So at the. So he's CEO of Pixar still, but now he's back in the. He's back in the seat at Apple.

[David Cancel]

Yep.

[Dick Costolo]

So now he's only at Pixar one day a week because there's all the stuff I got to go fix at Apple. So they're making like, Toy Story 2 and what Steve would do. So he's got one day to come up to speed on what the heck's going on at Pixar. So he'd go into the office on Friday and he would say, all right, today I want to sit down with like, the illustrators, you know, without Lassiter, the director of the movie, John, without Lassiter in the room. I just want to sit down. Me and the, you know, illustrators. And he would go, there's like eight or nine or whatever of them. It's a, you know, Janet, tell me something that's not working well at Pixar. And then, you know, Bob, do you agree with that? You know, taking notes like, okay, Phyllis, tell me something that's Working well at Pixar, not on the movie, not about your job. And at the end of the meeting, 45 minute, one hour meeting, would say, okay, here's what I heard. You know, people are having these kinds of issues. This is going really well. I'm going to go talk to John about it and he'll deal with it on. He'll deal with the rest of this on Monday. You know, you can follow up with him. So he's not saying, oh, yeah, that sucks, or, you know, no, you're wrong, or whatever. He's taking notes, making sure he hears everything that was said, and then going talking to Lassiter about it. I started doing that with teams. You quickly find out if that team knows what the priorities are, is in sync with what you're hearing from the leadership of that team. And some of the leaders of the company hated it. And I was like, well, now I'm concerned about why you. Why you hate it. Because, yeah, but I wouldn't, you know, you're not in that meeting doing things like throwing the director under the bus. You're going, okay, here's what I heard. I'm going to go talk to my management team about it on Monday. And, you know, Chris or whoever will follow up with you guys.

[David Cancel]

Let me switch to you on priorities. So all these CEOs I coach, they have their list of priorities. It's January 1st, but, oh, my God, there's so much opportunity, so much interesting stuff. And this employee has this thing going on. How often did you rejigger those priorities? Were you disciplined about over the course of whatever that period was?

[Dick Costolo]

You can rejigger them once in a while.

[David Cancel]

What's once in a while?

[Dick Costolo]

I don't know. Like, you know, if you've got four huge priorities for the first four to five months of the year, you can't, you can't get to February and go, these two are stupid. And we're, you know, once or twice a year you can go, this one is. Let's, let's actually change that one to this other thing. If you start doing it regularly, people are like, well, we can get to work on the direct messaging architecture, but Dick's probably going to, you know, 50, 50. He's going to. You just can't do stuff like that, by the way. That's another way companies slow down is because people are just like, look, I'm not going to bust my ass on this thing when there's a 50% chance Dick's going to throw it out the window in a month.

[David Cancel]

Yes, Let me test something on you. A lot of these hyper growers. It used to be that there were a lot of one way doors in the software industry. Stuff took a long friggin time to get up the door even to test.

[Dick Costolo]

Yeah.

[David Cancel]

And you had to kind of do things serially. Now you can do so much so fast. And so they're just doing more and it's more parallel. And a lot of those one way doors are two way doors. Is focus overrated now?

[Dick Costolo]

No, I don't think focus is ever overrated. However, the fact that you can do more quickly and since they're two way doors, you're like, great. Nope. I mean this is the old Jeff Bezos only take a long time to make decisions that are existential. Like we might die as a company if we make the wrong decision.

[David Cancel]

There's fewer and fewer of those decisions

[Dick Costolo]

that can be like if it doesn't, if we screwed it up, we can go back and do the other one, do those right away. So focus is still important, but it's also true that you should feel, you should feel like you can do a lot more now with less, because you can. There was a point in 2011 when we wanted to try to get Jeff Bezos to join the board of the company. Like we have an independent seat open. Who would be the best possible independent director? Jeff Bezos. So Jack and I go meet with Jeff Bezos. I think it was like at the Ellen Co. Conference or something like that. And Jeff asks a question about strategy and Steve Jobs was still alive at the time. And Jack said, well, Steve says the most important part about being a CEO is focus. And you should say no to almost everything. And it's, in fact it's the CEO's job to be the editor in chief and you should say no to almost everything and do very, very few things. And Bezos looks at Jack and goes, oh yeah, well I like to do everything. And he does the big Bezos laugh and he goes, my team has to talk me out of stuff. He goes, you know, there's lots of ways to be successful. And I remember that like it was yesterday. And he's right.

[David Cancel]

There's many ways to climb the mountain.

[Dick Costolo]

Yeah, I think it's true that today he would say, great, I can do even more now we can, we can still be focused, but I can do even more things. I think those, I think those things can both be true.

[David Cancel]

Okay, just want to get back to some of your management techniques because I think they were great. This management, by walking around was A very old school Hewlett Packard concept. Just talk about it. Sounds like you did the same time every week.

[Dick Costolo]

No, I did it at all hours.

[David Cancel]

Okay.

[Dick Costolo]

And mostly late night. It started because Bill Campbell, for people who don't know or listening to the podcast, Bill was on the board of Apple and famously coach Larry, Sergei, and Eric at Google. I wrote a book about him called Trillion Dollar Coach. He. The. The benchmark folks had also brought him into Twitter before I got there. And Bill famously said, when I took over as CEO, like, you could roll a grenade into Twitter at 5:30pm and only take out the cleaning people. So. And he was right. And he was. And he was right. So I was like, okay, how do you. You can't tell people. You just can't tell people. Work harder. You know, they're like, okay, you work harder.

[David Cancel]

Yeah.

[Dick Costolo]

You know, so what I did was, I just. I mean, it's so such a stupid thing, but I was like, all right,

[David Cancel]

I'll walk around at night.

[Dick Costolo]

I'm going to start. I'm going to go out, get dinner. I'm going to come back at like, 9pm, 9:30pm I'm going to walk around, and whoever's here, I'm going about the stuff they're doing at the next All Hands meeting, and I'm gonna, like, I'm gonna, like, bump up the prioritization of that.

[David Cancel]

Yeah.

[Dick Costolo]

And I remember, like, Marcel Molina at Noradio on Twitter. That's a. That's a little promotion for Marcel there. Marcel was always working late on stuff. And I would like, what are you working on? And, you know, I'm working on native retweet or whatever. And I would get up in front of the company and go like, what mar. The work Marcel is doing? And people were like, how come. How does he always know what Marcel is doing? And other people would go like, oh, Dick comes back after dinner at night and walks around. And people slowly, slowly, slowly started to change the culture of, okay, the people who are around when Dick's walking around are getting their stuff prioritized.

[David Cancel]

I copied you. I walked around Friday afternoons and I learned a lot.

[Dick Costolo]

Yeah. And you.

[David Cancel]

Yeah.

[Dick Costolo]

So I would just go, you know, up to engineers and go, like, what's going on? What are you working on?

[David Cancel]

Yeah.

[Dick Costolo]

Yeah.

[David Cancel]

You have an interesting expression that I don't understand about forest fires in forestry management.

[Dick Costolo]

Yeah.

[David Cancel]

What the hell are you talking about?

[Dick Costolo]

Yeah. I was trying to help a director in the company be more strategic. They were super tactical. And I was finally, your job as a director as you grow in this company is you can't just say like, well, I put out this forest fire. And put like, your job is to map the territory and start to do forestry management. Like, what are we going to do so that next year if there's a fire over here, that highway is not going to be in trouble. Like, you can only work so many hours a day, and stamping out fires isn't going to work. As we scale, you need to push those down the stack. Your team should be like, fighting the fire that's over there because it's might, you know, burn a house down or something. You need to be focused more on, like, thinking about this whole pie and what, what's going to be true. What has to be true 24 months from now. So that's whole pie is in. This whole territory is in better shape. And I just. That was the way I. That was the metaphor I had for helping people try to think strategically versus, like, well, I'm doing, you know, I'm chopping down the trees. Look, I'm. Look at all the trees. But that's not like leadership and strategy. That's tactics.

[David Cancel]

I like that. Okay, now I get it. One of the people I connected with before interviewing you said something interesting about you.

[Dick Costolo]

Oh, boy, I can hardly wait. I'm sure most people did, but anyway.

[David Cancel]

And both sides of this are interesting. He's both sides, he said, you know, Silicon Valley, San Francisco, everyone's passive aggressive. So I'm curious your take on that. Because I don't live in Silicon Valley. And the second thing he said, dick's not passive aggressive. Dick's aggressive.

[Dick Costolo]

Yeah.

[David Cancel]

Give me both sides of that.

[Dick Costolo]

It's just like, I am super impatient. I know this is a personal flaw, but I'm super impatient. People would come in and go, here's why I'm, you know, why I think or whatever, I'm sad, you know, like. And they would start talking to me like, okay, stop. Like, it seems like you don't like working here. You should quit.

[David Cancel]

Okay.

[Dick Costolo]

Like, no, I want to tell you I'm sad. You know, like, okay, I don't, like, I don't care. Who cares? I'm sorry. I'm not trying to be a jerk, but, like, we have a million things to do. I remember. And then, you know, I just, like, this is direct and blunt with people. Not a jerk. You don't have to. You don't have to. People think. Like, I think a lot of times, especially maybe engineering leaders who, you know, I've come up in the Organization like coding and programming and doing stuff on my own. And now I have to manage people. They think when you tell them you have to like, look, you have to manage performance in your team and have to manage poor performers out. They think you have to be a jerk when you do that. You have to be a jerk about it. You have to be direct about it and forthright and not, you know, no one's sadder than this about, than me, you know, don't say stupid stuff like that, okay? You can be empathetic and still be straightforward.

[David Cancel]

Okay. A lot of these CEOs I coach are in their, call it in their mid, late 20s and like in their whole life they haven't given. They don't go to like, mom, I get some feedback on dinner. Or like, you're playing, you're hogging the basketball. You've just never given a homo sapien feedback. It's unnatural.

[Dick Costolo]

Yep.

[David Cancel]

Advice for that CEO.

[Dick Costolo]

Yeah, my advice for that CEO, Bill Campbell actually gave me this advice early on is like, write down what you want to say and then say that and don't say anything else. So the night before, if you write back down the honest feedback that, you know, I would give Brian, especially if I have to give Brian a bad performance review the night before, if you write it down, I guarantee you 99 out of 100 people, if they go into the meeting the next day, they don't say that.

[David Cancel]

Okay?

[Dick Costolo]

They're like, listen, Brian. Instead they're like, you know, it's really hard time here for everybody. We're all working, you know, shut the fuck up. Like, the person knows you're about to like hit him over the head or something. And you also don't have to say like, hey, Brian, that's just the way it is. You know, too bad if you don't like it. You just, just write down what you want to say and be forthright and honest. And you know, you can say like, I understand. It's like, if you can't, don't want to deal with it anymore. I get it. And say those things and don't add a bunch of fluff around it. I thought that was great feedback and I would do that.

[David Cancel]

Sit with the silence.

[Dick Costolo]

Yeah, sit with, sit with the silence.

[David Cancel]

Sit with. Silence is hard.

[Dick Costolo]

Yeah. So it's unnatural. It's unnatural. The best person. So I used to do a thing in my management class where it was a six hour course. There was a ton of stuff in it, but one of the things I would do it was about feet giving people Feedback. And like, okay, like, Brian, you're gonna give Dick feedback. And the feedback is you've been working on this thing for six weeks and busting your ass and you've been here till midnight every night. And we have to cancel the project because it's no longer a priority for what? Something horrible that no one wants to hear. You know, some made up. Of course. The only person who did the role play that was ever good at sitting in silence was Elad Gill, current venture capitalist. Elad sat in the chair and gave the person the feedback. And I say to the employee, the IC before the roleplay, I kind of pull them aside and go, this is bullshit. And you're going to tell Dick and you don't want to hear this and it shouldn't be canceled. They need to look at the data, whatever. And Elad was great at just sit there, it's hard. And then eventually the other person runs out of gas and stops talking. And Elad was great at that. And the only person who ever did it.

[David Cancel]

Okay. One of the things I want to ask you about is you had some very talented folks, some of which you brought in, probably. Others brought in like Adam Bain and Kevin Wheel, Anthony Noto. Elad.

[Dick Costolo]

Yeah.

[David Cancel]

How did you guys recruit? What did you look for? Are you looking for slope or experience? Like, what was your filter?

[Dick Costolo]

It's a great question. I always, I actually tried to promote from within as much as possible because you want people inside the company to feel like we're not like going to get capped out. At which point, you know, I can only get to this level because anything above that dick just goes out and finds someone. So Kevin Wheel, for example, was promoted from within from an IC when I got there in 2009. Well, there were only a few people, 40 people or so in the company when I got there to eventually running all of product, after running all of ads product. So he was promoted from within. Noto was. I just felt like Twitter was such. Such a drama. Twitter is like the drama queen of hyper growth companies. You know, it was like constantly in the news. When I took over as CEO that year, the Twitter bird had hanged itself and exploded on two different magazine covers. So I went up to our head of communications, Gabriel Stricker, and I was like, gabriel, great news. Next year's goal, no dead birds on magazine covers. You know, low bar anyway. But it was just constant drama. And nodo was so good at Goldman Sachs, where he ran technology and media at dealing with investors and communicating with them, et cetera, that I had Been. I had been trying for a while to bring him into Twitter, and I was. I was finally able to. And he was. Of course, he's. He's fantastic.

[David Cancel]

How about Adam?

[Dick Costolo]

Adam was funny. Adam was a non. What you call a non consensus hire when I first recruited him, because it was while I was coo and I went to the board and ev and said I got the perfect person to run revenue at Twitter. It's this guy, Adam Bain. He's in LA and he works for Fox Interactive. And everyone was like, you're gonna bring in someone. Well, you're selling ads, so you're gonna want to bring in someone who works at Fox in LA and bringing them to San Francisco to run our, like, you know, revenue side of the business. But he was the perfect person to do it. I must have flown down there to LA for five or six months before I could convince him to do it. But I met him while we were in the process of selling feedburner, and his employer, News Corp, was one of the interested parties before Google bought it. And I got to know him and it was just like, man, this guy is, like, tireless. And we're gonna be in, like, a constant dog fight and fighting from behind against Facebook for social ad dollars. And Adam was just. He's just like one of those people who's got a motor that doesn't stop and who's the perfect person for the role.

[David Cancel]

There's an old adage, fire fast, hire slow. I always said that out loud. I didn't do that. I fired slow. And almost every time I was like, man, I should have been six weeks. I knew.

[Dick Costolo]

Yeah, yeah.

[David Cancel]

Were you disciplined about that?

[Dick Costolo]

Yeah. I tried to hold myself accountable to that. And it's horrible. Like, there's nothing horrible. There's nothing worse than having to do something like that. I remember one of my board members, David Rosenblatt, you know, I was. I always am a little bit like, come on. When people are like, oh, I like firing people because you know it's the right thing for them. Like, that just sounds like you're an asshole. Cause it's horrible, but you have to do it. And I remember I asked David Rosenblatt because I had to terminate someone with global operating responsibility. I was like, wait a minute. If I fire him in the morning, the people in Japan are going to be in bed. But if I fire them in the afternoon, then the people, you know, whatever. And so I was like, I got to figure out. And I was talking to my board about it, and David Rosenblatt who had been the CEO of Double Click before it sold to Google is like, oh, I had to do that. I actually saved the calendar date from that because I had a whole series of communications I had to roll out. This is where now a couple thousand person company, etc. With like 30 offices around the world. So I get his day, I get his day of communications. And the only thing I remember from it, it's a whole, you know, it was a whole layout of how to go about it. The only thing I remember From it is 6am Wake up in a cold sweat. You know, it's just horrible. Yeah. You know, it's not fun. You can't wait till it's over. Yeah. And you just have to be. But you have to do it. And most Jeff Wieners old analogy From he was LinkedIn CEO when I was running Twitter. Jeff Wiener would call it the for those of you who are baseball fans, he was like, you know, sometimes you're watching a baseball game and you see the pitching coach or the manager walk out to the mound and talk to the pitcher. And the pitcher's like, no, no, no, don't worry coach, I still got it. And the manager walks back to the dugout and this guy cranks one out of the park again. And you can see the manager walking out like, I knew it, I knew it. And Jeff was like, I never, I always tell myself, don't be the manager. Having the first conversation with the person when you know what you should be doing is having the second conversation with the person.

[David Cancel]

As a Red Sox fan that really hits, really hits home.

[Dick Costolo]

I think his example is actually Pedro, Pedro Martinez from the Red Sox.

[David Cancel]

But anyway, Brady Little. Did you take him out? Yes, I work with all these hyper growth companies. I think you do too. What are the pitfalls when you're in hypergrowth and what are your tips for the CEOs listening today who are growing incredibly fast?

[Dick Costolo]

One of the real pitfalls, especially for these hypergrowth AI companies that are going from single digit revenue million to 100 million, is it's very, very easy to take your eye off the ball when you raise too much money. And by taking your eye off the ball, I mean we're thinking about operating leverage and operating efficiency. Because once you've, once the money's there, you're like, don't have to worry about that. I'll go worry about this thing over here. And next thing you know, the burn is like, what are you worried about? It happens all the time. And Ryan wrote this great post saying, look I thought I was like Mr. Efficiency. We're going to be not, it's not gonna be the same for us. We're gonna be super capital efficient. But when you don't have to worry about it at all and there are a million other things to do, you stop worrying about it and you start getting.

[David Cancel]

Are people raising too much money?

[Dick Costolo]

I think so. In many, many cases. I don't know that the models are. The models probably need all the money for compute but like an app company going for it. Yeah. I think people are raising too much money. I think a lot of companies are raising too much money because you know, raising 100 million Series B is the, you know, is the new, you know, raising is the new $20 million Series B.

[David Cancel]

What else in hypergrowth, like what breaks in hyper growth?

[Dick Costolo]

Hiring. Oh, hiring. Almost. I mean my favorite thing is you talk to, you know, you talk to like a CEO who's like, I don't know, whatever. Pick, pick some number. You know, first company, they were lead product manager at awesome Fintech company X and now their CEO and they're like, we're only going to hire a players. You know, I'm like, yeah. P.S. guess what everyone. Yeah. Yeah. Come back to me when you're. When your customer success team has to hire twice as many people next quarter because you just turned a bunch of customers because no one checked in with them last quarter because you're growing like a weed and then tell me, you know, and you just, you just end up not doing that. And so one of the things that you have to do when you come to the realization that we don't only hire A plus players is you have to get like religious about. You have to manage out low performers. But as you move down the stack and you've got inexperienced managers who are first time managers, first time directors, man, there's nothing that they want to do less than let someone go. Yeah, they'll do anything to not do it. You prevent them from transfiring people. You know, transpiring is like Janet would be great on the ads team. She loves ads. You need people.

[David Cancel]

Yes.

[Dick Costolo]

And then you're like no, no, no. So I had a, you know, we had sort of performance reviews. I was like, if your review is below X number, you can't switch teams.

[David Cancel]

Yeah, like that's a good idea.

[Dick Costolo]

You know, whatever. Let's say it's one through four. Four is amazing. One is you gotta go. If you're a two, you can't move teams until you're no longer a two. P.S. if you go two to three to two, I'm gonna talk to your manager again and go, don't. Let me guess. This person can be a three again this next term, so you don't have to put them on a performance plan. So we would, after performance reviews, always go through as a senior team, like, okay, I can see from the way these people, these couple people or these eight people are bouncing from two to three to back to two to back to three, like you're just trying to not fire people. And I can see that your curve is inflated and blah, blah, blah. So we would just be super hardcore about that. So you can't do that.

[David Cancel]

You know, let's talk about competition for a second. You had some. I mean, you're competing with, With Facebook.

[Dick Costolo]

Yeah, they were the juggernaut that we just had the hardest time.

[David Cancel]

Like, in, like tomorrow, I'm speaking at another company meeting. I'm not gonna say the name of the company, but they're. They're going to be competing with OpenAI and Anthropic. Almost every boardroom I'm in is talking about that. Everyone's anxious about that. Their employees are anxious about that advice about that.

[Dick Costolo]

First of all, you have to acknowledge it. And then you just have to. I mean, one of the things I would always do is like, they're like, huge, and Mark is the most competitive person on the planet. Trust me when I tell you, like, they don't, like, they don't say to themselves, oh, whatever, Twitter won that thing, that's fine. They're like, that can never happen again. So we have to be like. And we're, we're way smaller than them and have far fewer resources and can, you know, and so it was just like, we just have to be. We have to, we have to think about them, we have to talk about them, have to understand what they're doing and have to try to figure out how to out hustle them. And Bain, Adam Bain on the revenue team was great at that. He would come into company meetings at Consumer Electronics show at the beginning of the year and go to one of the first big customer meetings. Like, let's say it's Unilever. And he would sit down with the CMO from Unilever before the meeting and say, how'd the Facebook meeting go? You know, oh, great. What are they like? What are they. What are they psyched about? What are they psyched to show you this year? You know, and then he would go into the. He would learn all that and then he would go into the meeting with the Unilever and say, you know, even if we had a bunch of things to show them, he would say, we have some things we want to show you, but we really want to spend the next two hours today just understanding your business and what you guys are concerned about, what your problems are. I mean, knowing that she just told him that the Facebook people came in and showed us this and this and this and weren't asking those kinds of questions. Now, Facebook wised up to that over time, et cetera. But Adam had just come up with a great way of thinking about how to compete with this juggernaut. And the juggernaut's rolling out new things every quarter. That's really good salesman, which is good salesmanship. He's like, I can't compete with their eight new things, and they're micro targeting and blah, blah, blah. So I'm going to totally come at it from a different angle. And it was just smart about learning how to do that by talking to the customer beforehand.

[David Cancel]

You guys picked the advertising model to make money. As you look back at that, good call.

[Dick Costolo]

Yes. Advertising is undefeated. The ARPU is higher. It just is on versus subscription revenue, et cetera. I think we would do the same thing over again.

[David Cancel]

Any other. As you look back, like, man, I wish I had to do over on that one.

[Dick Costolo]

Oh, yeah, we tried to buy Instagram the month before, month and a half before Facebook bought it. And by the way, for a much higher percentage of the company that, you know, Facebook's offer as famously a billion dollars. And I think it was 700 of stock and 300 million of cash. I only had eight or nine employees at the time, Mike Krieger and Kevin Systrom. But we knew well before that, like, these guys are. Kevin is an extraordinary product manager. Kevin and Evan Spiegel, I think, are probably two of the best product thinkers in Silicon Valley. And so I knew that. And well before Mark made his offer to them, I pulled Kevin, went out to dinner with Kevin and Mike and told them we wanted to buy the company and would end up giving them basically well over 10% of Twitter and, you know, something equivalent to 700 million in stock. And we were maybe valued at $5 billion at a time. And, you know, I would have gone and could I go back there and talk to Kevin? I would say, like, you can run the company when I leave. Like, congrats, you'll get to be. I mean, may still not have done it. And I would also say, also, I'll go borrow $300 million. From JP Morgan and give it to you.

[David Cancel]

I see.

[Dick Costolo]

And you can have it all and we'll pay them back later. Because that was a game changer. Once they had Instagram, I was like, oh, man, we're like boxed out. On that is the future of rich media, social media feeds. We have vine, but it's much, much smaller. And they're not going to come at us on Instagram with video, which of course they did. And that was sort of checkmate.

[David Cancel]

Other regrets? Any regrets on man, the content moderation stuff has been in the news over the last five years. It wasn't as hot while you were there as you looked at. Back at that regret.

[Dick Costolo]

It was always like. It was the thing I'll say about content moderation that people get wrong.

[David Cancel]

Yeah.

[Dick Costolo]

All the time is like, this is really easy. Just prevent people from doing that. Like, okay, well, that is a lyric in a Kanye song. Can you not tweet his lyrics or whatever? Or. It's easy.

[David Cancel]

Just.

[Dick Costolo]

I'll give you. I'll give you a specific example that I always think highlights why it was such a pain in the ass and it's so hard. And you can't just come up with a set of. These companies try to come up with a set of rules and like, well, if it violates the rule, you have to kick it off. And if it doesn't violate the rule, you can't kick it off. Like, that's. You just can't think about it that way. These things are so subjective. So isis, the terrorist organization, captures three pilots from some. Some air force and puts them in cages, basically on a beach and lights them on fire and kills them, basically burns them to death. And they post these to Twitter photos and videos. And my general counsel comes to me and goes, hey, these terrorist accounts are. I'm like, great. She's like, suspend the accounts, right? Like, yeah, of course. Like right away. Anyone that posts the, you know, media of these pilots being lit on fire, like, suspend the account. Well, the frickin New York Post, an hour later, posts the picture huge photo of this pilot being lit on fire and suspend. You know, and then I get this like, hey, what you suspect, you know, Kara or someone like, why'd you suspend the New York Post? Like, what? We didn't suspend the New York Post. Yeah, you did. And you're like, okay, wait, I guess the New York Post can do it, but now who can't do it? And that was one tiny example. It was just so, so infinitely hard. And you just can't. My. The Big if I could go back again is you just can't have these hard and fast rules. There has to be, again, pushing, you know, having operating control and somebody with an understanding of the situation, like our gc. You're going to just have a bunch of judgment calls and you're going to get a bunch of them wrong.

[David Cancel]

And that's life in like, after your tenure. And like, I don't know what to believe, but it looks like there was a lot of conversation between the Biden administration in that group and then a lot of accusations from Elon that that group was just very left of center in their orientation. Any reaction to that? Was that the case when you were there?

[Dick Costolo]

I mean, yeah, probably it was left of center, but I don't think that. I don't think when I was there that. I don't think it impacted the way we thought about abuse. I mean, it wasn't like you, you know, we didn't have any, like, for example, we didn't have any, like, oh, you're not allowed to dead name trans people. Like, that stuff was all post me being there at the time. It was mostly what we were dealing with.

[David Cancel]

Culture war kind of happened after you.

[Dick Costolo]

Yeah, the, the. Yeah, the stuff we were dealing with. And I went. When I was. There were ridiculous amounts of Russian bots, which at the time were not election stuff. It was maybe they were preparing for. Preparing the groundwork for 2016, but it was mostly like phishing attacks and just massive bot farms that were doing phishing attacks on. On people and trying to hack into their accounts or get credit card information, et cetera.

[David Cancel]

Most of the CEOs who have been around a while have got a shit ton of bad press. You got a metric ton of bad press. I got a bunch of bad press. It impacted me. I tried to show a face like it didn't, but it was soul crushing to me.

[Dick Costolo]

Yeah.

[David Cancel]

How did you handle it?

[Dick Costolo]

I don't know. I had the fortunate opportunity to be a performer and do improv comedy and stuff and auditioned for SNL a couple times before I went back into business. And I had been like, you know, I was. I remember I was at the Adelaide Comedy Festival with my improv group and we had this midnight show at the Opera House. The Adelaide Opera House. Adelaide Opera. Yeah. And the crowd is hammered.

[David Cancel]

Okay.

[Dick Costolo]

Drunk, maybe a thousand people. And it's like an hour and 10 minute show, completely improvised. We get on stage and like five minutes in, the crowd starts yelling like, you suck. Get off. And like, man, we got 80 more minutes. Or whatever. And so, I don't know, I just became resilient to, like, oh, well, we

[David Cancel]

gotta, like, did it hurt inside?

[Dick Costolo]

I don't know. Like, we got good press. I remember my daughter called me.

[David Cancel]

The good press never hit for me.

[Dick Costolo]

No, no, I'll tell you, my daughter called me. This is at the end of 2014. So 2013, we go public, IPO successful. Everyone's super excited. Go, yay, us. And there's some, you know, these stupid awards that come out, come out, and like, CEO of the year, Dick Costello under 2014. My daughter texts me. She's like, I have bad news and good news. And I was like, what's the bad news? She's like, yahoo Finance says you're one of the five worst CEOs of 2014. I was like, what's the good news? She goes, nobody reads Yahoo Finance.

[David Cancel]

Okay, got it. Okay.

[Dick Costolo]

I just felt like. I don't know. It's like, you're like, okay. And I'll say one last thing on it. I've said this a bunch, but. But I think is important. I got invited to go to, like, the Vanity Fair Oscars party. One of the years, by the way.

[David Cancel]

That must have been cool.

[Dick Costolo]

Well, I got invited to go. I didn't go. And I told my daughter. Good question. So I told my daughter, I don't want to start going to a bunch of stuff that I get invited to because I'm the CEO of Twitter. Because then I'll be like, oh, I don't want to not be the CEO of Twitter because I won't get invited to the. So I went to the NBI All Star Game because I knew Adam Silver, and he invited. I felt like it was a Dick costalo invitation. I was like, I'll go to things I get invited to because I'm Dick Costello. I don't want to go to things that the CEO of Twitter gets invited to because then I'll be like, wasn't

[David Cancel]

it part of your job?

[Dick Costolo]

No, I mean. I mean, going to the White House, sure. Like, hey, the president wants to talk to you about, you know, Edward Snowden and abuse on the platform and what are we going to do about terrorists using the services? Yeah, you got to go to that as part of the job. But go into the, like, going to these things, you know, like the Oscars or whatever. Like, I don't know. I don't know any of these people. They don't care about it.

[David Cancel]

I totally would have done it.

[Dick Costolo]

Yeah, I totally would. Well, you would have been standing over in the corner going like no one's talking. Tom totally nobody's. Tom Cruise isn't talking to me.

[David Cancel]

It's exceptionally rare these days that somebody a founder led company is replaced or just they don't hire the adult external CEOs. Is that should it be happening a lot more?

[Dick Costolo]

I think it goes in waves and

[David Cancel]

it's like not doesn't happen at all these days.

[Dick Costolo]

Yeah, I know. I think it goes in waves and I think it will continue to be there will something will happen and people will start going, you know, we really need for these companies that are making, you know, $4 billion in revenue after three years and the 26 year old founders are. They'll just something will happen and it will. There will be a wave of, you know, operating executives coming back in and running some of the companies. It happens a little bit like Slootman

[David Cancel]

and you know, pretty rare.

[Dick Costolo]

Yeah, yeah, rare. Agree.

[David Cancel]

Even the public companies like MongoDB my workday recently but like maybe one a year.

[Dick Costolo]

Yeah, it's true. I do think it goes in waves. We'll see if it. We'll see if it happens.

[David Cancel]

Okay. You're a VP of blahbity blah company and you want to be a Dick Costello. What should you do? You want to be that adult?

[Dick Costolo]

Oh, you want to be that adult?

[David Cancel]

I want to be you when I grow up.

[Dick Costolo]

Anthony Noto did you know when he was CFO at Twitter, he started telling. Making it clear to, you know, executive recruiters like, I want a CEO role. Like start, you know, when you start seeing CEO roles, I might not get one right away, but like I want to, I want to talk to you about CEO roles when you get them.

[David Cancel]

I got it.

[Dick Costolo]

Get your name out there and just. I never, Ian Anthony would tell you this too about his own career. I never took like a risk that I didn't, you know, that I wasn't super psyched. I took even when I was like trying to get on SNL and wasn't successful, it ended up benefiting me down the road because it was like, like, all right. Like, like live TV on cnbc. Are you okay doing that? I'm like, look at the camera. Like I got booed at midnight in Australia by a thousand people. I can look in the camera and

[David Cancel]

talk about should all CEOs take. My co founder took a comedy class in business school. Yeah, it really helped him.

[Dick Costolo]

Yeah. Being on stage and you know, being uncomfortable being on stage. You stand up at all hands meeting. You were like, I know exactly what I'm going to say at the all Hands meeting, I'm just going to talk about the priorities. That's easy after doing that.

[David Cancel]

Okay, let me give you a fun one.

[Dick Costolo]

Yeah, hit me.

[David Cancel]

Is San Francisco passive aggressive? Is everyone Passive aggressive? Are CEOs passive aggressive?

[Dick Costolo]

I think there's a lot of passive aggressiveness. I think I know, I know the person you talk to and I think, and I know the other companies he's been at. I think he's generally right. But there are some great exceptions. I think the Collison brothers at Stripe are both that rare combination of really, really widely read and polymaths and have a broad perspective on humanity and biology and the human condition and are forthright communicators and are neither passive aggressive nor hyper aggressive. They're forthright and straightforward and blunt. And I think those guys are great. And I feel the same way about Reed Hastings, a totally different executive at Netscape. At Netflix, Reid is always like, this is just how it is. You know, like, I'm not, I don't, I'm not trying to be mean about it. This is just the way it is. And I think it, I think you rhyme with Reed.

[David Cancel]

In my head.

[Dick Costolo]

Yeah, yeah, yeah. I take that as a huge compliment. I love that guy. I always thought those three people, John and Patrick at Stripe and read it Netflix, are extremely self aware. I remember it was at a table with Reed at a dinner once and he went around the table and said, I want to hear everybody's opinion on this. How much of your success do you think is based on your DNA and how much of it is based on like, I just learned how to kick ass and be amazing. And I kind of, I was like, I think I know where he's going with this. And of course, when he got around to himself, he was like, I think it's basically like 80% DNA.

[David Cancel]

Interesting.

[Dick Costolo]

Yeah.

[David Cancel]

How would you answer that?

[Dick Costolo]

Yeah, I think similarly, and I think that's a. I think that's a result

[David Cancel]

of him being luck versus Skill.

[Dick Costolo]

Yeah, I think there's certainly a bunch of luck, but I don't think he was saying luck versus skill. I think he was sort of saying like, you're not like some, you know, exceptional person who came out and like, I'm going to fight against the, like, it's basically encoded in you to be this way and, you know, it's, it's ended up helping you. And sure, there's like 20% luck along the way that put you in the position to get this role that you might not have otherwise. Had. But you were always going to do something like this.

[David Cancel]

Okay, you brought up some good CEOs. The CEO Rulebook feels to me to be changing. Your take on how Jensen Huang runs that with like 60 direct reports, no

[Dick Costolo]

one on ones criticizing.

[David Cancel]

He's got a whole different playbook. The thing that surprises me is I work with all his CEOs. Nobody's copying him. Which I think's interesting. Your take on that.

[Dick Costolo]

I go back to the Jeff Bezos comment to Jack Dorsey. Jack, there are lots of different ways to be successful. I think that. I think that the mistake that CEOs make is they read the Walter Isaacson book on Elon Musk or they read the one on Steve Jobs and they think this is the archetype. And Walters just left out a whole bunch of stuff. And that's not.

[David Cancel]

Did you have an archetype?

[Dick Costolo]

No, I didn't have an archetype.

[David Cancel]

Steve Jobs was mine. He tried to copy everything he did. I did it quite poorly.

[Dick Costolo]

I mean, it goes again to the. Well, Steve says you have to be an editor. And you say. And Jeff saying, like, oh, yeah, well, there's lots of different ways to do it. And the reason I say that about the books is not just because they're more mythology than they are what really happened. Some of it's, of course this happened, but it leaves out a bunch of stuff. But more importantly, if you try to be someone you're not, nobody is fooled. Like, you think people are fucking fooled. Nobody is fooled. Everyone knows you're spinning them or you're playing some role and you're not yourself. And nothing is more miserable than trying to be someone you're not. One of the things I used to. I used to do this in my management class, actually, during one of the NBA Finals back in, like, the 90s. This reporters in the Houston Rockets locker room. And it was at a time where Charles Barkley did this ad for Nike where Charles dunks a basketball and he looks at the camera and goes, I ain't no role model. Something like that.

[David Cancel]

Yeah.

[Dick Costolo]

And this reporter's in the Houston Rockets locker room and ask Hakeem Elijah, he wasn't wrong. He wasn't wrong. He wasn't wrong. Although he appears to be on Ozempic or something. He's gotta have his suits retailered. This reporter's in the Houston Rockets locker room and goes up to Hakeem Olajuwon and says, you know, Charles Barkley says that kids shouldn't, you know, idolize, look up to NBA players, role models what do you think about that? And Hakeem Olajuwon goes, I'm happy to be a role model. I love being a role model for kids. She's like, well, what do you. And Hakeem says, well, here's the deal. Charles is a different person in public than he is in private. And so he's got this anxiety and tension in his mind about whether he's supposed to be public Charles in this moment, or private Charles in this moment. I'm always the same person. So if people want to look up to me as a role model, that's fine with me. I just think that it's nothing but misery. If you're trying to look at some written down playbook of how Steve Jobs did things, and I gotta go do that when it's almost. It was impossible for Steve to do it almost. And you're certainly not gonna be able to do it and you'll be miserable trying.

[David Cancel]

Okay, last question I have is like the Twitter board, man, there was a lot of frigging drama there.

[Dick Costolo]

Tons.

[David Cancel]

So much, so much you're building that you're a hundred million dollar company going in. 400 million. You're building a board. Advice like, should you bring in independence early? Should you wait?

[Dick Costolo]

I had two board members that were immensely helpful to me. Peter Chernin, who had brought in from News Corps as an independent director because he'd managed tens of thousands of people. And I need someone with operating experience, global operating experience. And Peter was great at always, like, always did the sort of the Jeff Bezos, let's talk about this from the user's perspective instead of like, how are we going to do xyz, he would always back up and say, wait, if I'm the chief User Officer at this company, you know, and I'm thinking about this from the. And so that was immensely helpful in lots and lots of cases. And then secondly, Peter Fenton from Benchmark would always help me interview candidates and either close them or help me with, hey, how should I think about this candidate? And that having someone on your board who's not in the day to day at the company and who can also give the candidate a sort of a third party perspective on why I think this is going to be a monster and why I think you should do this was like crazy helpful and helped convince numerous execs like Adam Bain and

[David Cancel]

Anthony Otto, okay, you're at $100 million, you're doing your Series B. Do you bring in independent or you. What happens now is they wait right before the ipo.

[Dick Costolo]

No, Yeah. I think it's helpful to have operating people with operating expertise in there much sooner than that.

[David Cancel]

Okay. And just while we're on ipo, you took Twitter public. It's been very hard to take companies public. It's become very unfashionable to take companies public.

[Dick Costolo]

I would have kept it private longer if I could go back and do anything over again.

[David Cancel]

I would have too.

[Dick Costolo]

It's just so much easier running a private company and not having to like, okay, well that's going to mean we're going to miss the revenue number by a percent. It's the right thing to do. But you know the employers are going to be running around like, what's wrong when the Stock goes down 8% after hours, you know, and as you know, you don't have a daily ticker that the employees are freaking out about when you're a private company. And it's just a lot more. You can be. It's so much easier and stress free to focus on the long term as opposed to, okay, now we have to make a long term versus a short term to have a discussion about this because you know everything's going to go sideways if we do this in Q1 instead of blah, blah, blah. You get it?

[David Cancel]

Okay.

[Dick Costolo]

It was just, it's just a lot easier to run a private company.

[David Cancel]

I wanted to talk to you for a long time because you are kind of a rare species these days. The adult CEO brought into a hypergrowth company. And you delivered. Thanks for coming on the pod.

[Dick Costolo]

Thanks for having me.

[David Cancel]

Okay. I thought Dick was great. It's a masterclass on how do you scale and be a terrific scale up CEO. There's a few things he talked about that I think are worth reviewing, some of which I did, some of which I wish I did when I was CEO of HubSpot. One thing he did that I totally did was management by walking around. I'd wait until like 7:00 clock at night and I walk the halls of HubSpot through the Dev organization, support sales, who was around and really hear what, what was happening. That was super useful for me. It was great context and it was also good to see who was from the midnight oil. I liked his feedback around giving tough people tough feedback. I was never very good at this. And his advice is good. It's, you know, the night before you're going to get feedback for that tough person. It's not great feedback. You got to write it down the night before, practice it in the mirror. I think that's good advice and when you deliver it, you deliver it and you sit in silence. No fluff. You sit in silence. Really hard to do, but I think that's great advice. He talked about killing committees and using DRIs. A lot of the CEOs I've interviewed are talking about similar things, particularly important as you've got silos in your organization. And the important stuff cuts across boundaries of those silos. He gave a great quote from another POD guest, Ben Horowitz. He said, make sure everybody understands what you understand, not just the what, the why and what success means for them personally. Priorities without context are useless. I thought that was a gem from Ben, and I thought it was really cool that he repeated it. He accused Silicon Valley of being passive aggressive. He said he's not. He's aggressive. I think that's good advice. Like a lot of CEOs, he says you should hire fast and fire slow. He didn't fire slow. Almost no other CEOs don't fire slow. I did not fire slow. And so he wishes he did that. Some gems in there. Hope you enjoyed it and looking forward to having the next pod.